[Federal Register Volume 67, Number 45 (Thursday, March 7, 2002)]
[Notices]
[Pages 10377-10381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5472]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-810]


Stainless Steel Bar from India; Preliminary Results of 
Antidumping Duty Administrative Review and Partial Rescission of 
Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of preliminary results and partial rescission of 2000-
2001 administrative review.

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SUMMARY: In response to requests from interested parties, the 
Department of Commerce is conducting an administrative review of the 
antidumping duty order on stainless steel bar from India with respect 
to Viraj Group, Limited (``Viraj''). This review covers sales of 
stainless steel bar to the United States during the period February 1, 
2000, through January 31, 2001.
    We preliminarily find that, during the period of review, Viraj has 
not made sales below normal value. If these preliminary results are 
adopted in our final results of this administrative review, we will 
instruct the Customs Service not to assess antidumping duties. 
Interested parties are invited to comment on these preliminary results. 
Parties who submit arguments are also requested to submit (1) a 
statement of the issue and (2) a brief summary of the argument.

EFFECTIVE DATE: March 7, 2002.

FOR FURTHER INFORMATION CONTACT: Melanie Brown or Cole Kyle, Office 1, 
AD/CVD Enforcement, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington D.C. 20230; telephone (202) 482-
4987 or (202) 482-1503 respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions of the Tariff Act of 1930, as amended 
effective January 1, 1995 (``The Act'') by the Uruguay Round Agreements 
Act (``URAA''). In addition, unless otherwise indicated, all citations 
to the Department of Commerce's (``the Department'') regulations are to 
19 CFR part 351 (April 2001).

Background

    On February 21, 1995, the Department published in the Federal 
Register (60 FR 9661) the antidumping duty order on stainless steel bar 
from India. The Department notified interested parties of the 
opportunity to request an administrative review of this order on 
February 14, 2001 (66 FR 10269). In February 2001, the Department 
received requests for review from five Indian producers of the subject 
merchandise: Shaw Alloys Corp., Ltd (``Shaw''); Ferro Alloys Corp. Ltd. 
(``FACOR''); Isibars Limited (``Isibars''); Viraj Group, Ltd. 
(``Viraj''); and Panchmahal Steel Limited (``Panchmahal''). Concurrent 
with their request for review, Isibars and Viraj also requested 
revocation from the antidumping duty order. In accordance with 19 CFR 
351.221(b)(1), we published a notice of initiation of this antidumping 
duty administrative review on March 22, 2001 (66 FR 16037) with respect 
to Shaw, FACOR, Isibars, Viraj, and Panchmahal. The period of review 
(``POR'') is February 1, 2000, through January 31, 2001.
    On March 30, 2001, Shaw Alloys withdrew its request for review. 
Panchmahal and FACOR withdrew their requests for review on June 1 and 
June 13, 2001, respectively. The above withdrawal requests were timely 
and no other interested party had requested a review of these 
companies. Therefore, in accordance with 19 CFR 351.213(d)(1), we are 
rescinding the reviews of Shaw, FACOR, and Panchmahal.
    On December 20, 2001, Isibars withdrew its request for review. 
Although this withdrawal was received

[[Page 10378]]

by the Department after the regulatory deadline of June 20, 2001, 
section 351.213(d)(1) of the regulations permits the Department to 
extend the deadline if ``it is reasonable to do so.'' Therefore, in 
accordance with section 351.213(d)(1) of the Department's regulations, 
the Department extended the deadline to withdraw requests for review 
and rescinded the administrative review with respect to Isibars (See 
the January 3, 2002 memorandum to Richard Moreland entitled, 
``Rescission of Administrative Review of Isibars, Ltd.'' which is on 
file in the Department's Central Records Unit (``CRU'') in the main 
Department building). Therefore, for purposes of this administrative 
review, the only company reviewed is Viraj.
    On July 19, 2001, the petitioners alleged that Viraj had made sales 
below the cost of production. Because the petitioners' allegation 
provided a reasonable basis to believe or suspect that sales in the 
home market by Viraj had been made at prices below the cost of 
production, the Department initiated a sales below cost investigation 
of Viraj on September 7, 2001. (See Cost of Production Analysis below).
Request for Revocation
    According to section 351.222(b)(2)(i) of the Department's 
regulations, the Secretary may revoke an antidumping duty order in part 
if one or more of the exporters or producers covered by the order have 
sold the merchandise at not less than normal value for a period of at 
least three consecutive years. Section 351.222(b)(4)(d)(1) allows that 
the company requesting revocation need not have been reviewed during 
the intervening year (i.e., ``any year between the first and final year 
of the consecutive period on which revocation or termination is 
conditioned'' (351.222(b)(4)(d)(2)).
    Viraj was reviewed in the 1998-1999 administrative review and 
received a 2.50 percent margin (See, Stainless Steel Bar From India; 
Final Results of Antidumping Duty Administrative Review and New Shipper 
Review and Partial Rescission of Administrative Review, 65 FR 48965 
(August 10, 2000). Viraj was not reviewed in the 1999-2000 
administrative review (the ``intervening year''). Viraj's request for 
revocation is based on an assumption that it will be found to be not 
dumping in the pending litigation of the 1998-1999 administrative 
review, not on the basis of an actual finding of no dumping. Because 
Viraj was found to be dumping in the 1998-1999 administrative review at 
2.50 percent, Viraj has not had three consecutive years of no dumping. 
Accordingly, we find that Viraj does not meet the standard for 
revocation. In addition, the Department notes that Viraj failed to 
certify commercial quantities pursuant to 19 CRF 351.222(e)(1)(ii) of 
the Department's regulations.
Scope of Review
    Imports covered by this review are shipments of stainless steel bar 
(``SSB''). SSB means articles of stainless steel in straight lengths 
that have been either hot-rolled, forged, turned, cold-drawn, cold-
rolled or otherwise cold-finished, or ground, having a uniform solid 
cross section along their whole length in the shape of circles, 
segments of circles, ovals, rectangles (including squares), triangles, 
hexagons, octagons, or other convex polygons. SSB includes cold-
finished SSBs that are turned or ground in straight lengths, whether 
produced from hot-rolled bar or from straightened and cut rod or wire, 
and reinforcing bars that have indentations, ribs, grooves, or other 
deformations produced during the rolling process.
    Except as specified above, the term does not include stainless 
steel semi-finished products, cut length flat-rolled products (i.e., 
cut length rolled products which if less than 4.75 mm in thickness have 
a width measuring at least 10 times the thickness, or if 4.75 mm or 
more in thickness having a width which exceeds 150 mm and measures at 
least twice the thickness), wire (i.e., cold-formed products in coils, 
of any uniform solid cross section along their whole length, which do 
not conform to the definition of flat-rolled products), and angles, 
shapes and sections.
    The SSB subject to these reviews is currently classifiable under 
subheadings 7222.11.00.05, 7222.11.00.50, 7222.19.00.05, 7222.19.00.50, 
7222.20.00.05, 7222.20.00.45, 7222.20.00.75, and 7222.30.00.00 of the 
Harmonized Tariff Schedule of the United States (``HTSUS''). Although 
the HTSUS subheadings are provided for convenience and customs 
purposes, our written description of the scope of this review is 
dispositive.

Collapsing

    The regulations state that we will treat two or more affiliated 
producers as a single entity where those producers have production 
facilities for similar or identical products that would not require 
substantial retooling of either facility in order to restructure 
manufacturing priorities, and we conclude that there is a significant 
potential for the manipulation of price or production. In identifying a 
significant potential for the manipulation of price or production, the 
factors we may consider include the following: (i) The level of common 
ownership; (ii) the extent to which managerial employees or board 
members of one firm sit on the board of directors of an affiliated 
firm; (iii) whether operations are intertwined, such as through the 
sharing of sales information, involvement in production and pricing 
decisions, the sharing of facilities or employees, or significant 
transactions between the affiliated producers. See 19 CFR 351.401(f).
    The Viraj Group Ltd. has responded to the Department's 
questionnaire on behalf of the affiliated companies, Viraj Forgings, 
Ltd. (``VFL''); Viraj Alloys, Ltd. (``VAL''); Viraj Impoexpo, Ltd. 
(``VIL''); and Viraj USA, Inc. (``Viraj USA''). Based on the 
information currently on the record, we agree with Viraj that these 
companies are affiliated and should be collapsed for purposes of these 
preliminary results.
    The information on the record indicates that there is common 
ownership among the companies in the Viraj Group Ltd. and that certain 
individuals serve on the board of directors of each of the four 
companies. The operations of the companies are intertwined through 
close supplier relationships, as VAL supplies VIL with the input hot-
rolled bar VIL processes into bright bar and sells to the United 
States. VAL, VIL, and VFL each use production facilities for similar or 
identical merchandise. VAL produces hot-rolled round bars and billets 
for sale in the home market. VIL also produces stainless steel billets, 
flanges, forgings and wires. VFL produces stainless steel forged 
flanges from billets procured from VAL. There is no evidence on the 
record to indicate that substantial retooling would be required for 
VAL, VIL, or VFL to restructure their manufacturing priorities.
    Because the Viraj companies are under common control and ownership, 
the three producing companies use similar production facilities to 
produce similar products, and the operations of the companies are 
intertwined, we preliminarily find the Viraj companies are affiliated 
for the purposes of this administrative review and that VAL, VIL, and 
VFL, should be collapsed and considered one entity pursuant to section 
771(33) of the Act and section 351.401(f) of the Department's 
regulations. We will consider this issue further for the final results.

Fair Value Comparisons

    To determine whether sales of stainless steel bar from India to the 
United States were made at less than

[[Page 10379]]

normal value, we compared export price (``EP'') or constructed export 
price (``CEP'') to the normal value (``NV''), as described in the 
``Export Price/Constructed Export Price'' and ``Normal Value'' sections 
of this notice. In accordance with section 777A(d)(2) of the Act, we 
calculated EPs and CEPs for comparison to weighted-average NVs.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced and sold by the respondents in the home market during 
the POR that fit the description in the ``Scope of Investigation'' 
section of this notice to be foreign like products for purposes of 
determining appropriate product comparisons to U.S. sales. We compared 
U.S. sales to sales made in the home market, where appropriate. Where 
there were no sales of identical merchandise in the home market made in 
the ordinary course of trade to compare to U.S. sales, we compared U.S. 
sales to sales of the most similar foreign like product made in the 
ordinary course of trade. In making the product comparisons, we matched 
foreign like products based on the physical characteristics reported by 
the respondent.

Export Price/Constructed Export Price

    We calculated EP in accordance with Section 772(a) of the Act for 
those sales where the merchandise was sold to the first unaffiliated 
purchaser in the United States prior to importation by the exporter or 
producer outside the United States. We based EP on packed, CIF prices 
to unaffiliated purchasers in the United States. We made deductions 
from the starting price for movement expenses including, inland 
freight, international freight, marine insurance, and brokerage, in 
accordance with section 772(c)(2)(A) of the Act.
    In accordance with Section 772(b) of the Act, we calculated CEP for 
those sales to the first unaffiliated purchaser that took place after 
importation into the United States. We based CEP on packed, CIF duty-
paid prices to unaffiliated purchasers in the United States.
    We made deductions from the starting price for movement expenses, 
including inland freight, international freight, marine insurance, 
brokerage and handling, and U.S. customs duties, in accordance with 
section 772(c)(2)(A) of the Act, where appropriate. We increased the EP 
and CEP, where appropriate, by the amount of duty drawback in 
accordance with section 772(c)(1)(B) of the Act.

Normal Value

1. Home Market Viability
    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
whether the aggregate volume of home market sales of the foreign like 
product is equal to or greater than five percent of the aggregate 
volume of U.S. sales), we compared Viraj's volume of home market sales 
of the foreign like product to the volume of U.S. sales of the subject 
merchandise, in accordance with 19 CFR 404(b)(2) of the Department's 
regulation. Because Viraj's aggregate volume of home market sales of 
the foreign like product was greater than five percent of its aggregate 
volume of U.S. sales for the subject merchandise, we determined that 
the home market was viable.
2. Cost of Production Analysis
    Based on our analysis of an allegation made by petitioners on July 
19, 2001, we found that there were reasonable grounds to believe or 
suspect that the respondent's sales of the subject merchandise in their 
respective comparison markets were made at prices below their cost of 
production (``COP''). Accordingly, pursuant to section 773(b) of the 
Act, we initiated an investigation to determine whether Viraj made home 
market sales during the POR at prices below the COP, within the meaning 
of section 773(b) of the Act (See Memorandum from Team to Susan Kubach, 
Director, AD/CVD Enforcement Office 1, Allegation of Sales Below the 
Cost of Production for Viraj Impoexpo Ltd., dated September 7, 2001). 
We conducted the COP analysis described below.
3. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of the Viraj's cost of materials and fabrication for 
the foreign like product, plus amounts for general and administrative 
expenses (G&A), and interest expenses, where appropriate. We relied on 
the COP information provided by Viraj in its questionnaire responses.
4. Test of Home Market Prices
    On a product-specific basis, we compared the weighted-average COPs 
to home market sales of the foreign like product during the POR, as 
required under section 773(b) of the Act, in order to determine whether 
sales had been made at prices below the COP. The prices were exclusive 
of commissions and indirect selling expenses. In determining whether to 
disregard home market sales made at prices below the COP, we examined 
whether such sales were made (1) within an extended period of time in 
substantial quantities, and (2) at prices which did not permit the 
recovery of costs within a reasonable period of time.
5. Results of the COP Test
    Pursuant to section 773(b)(1) of the Act, where less than 20 
percent of a respondent's sales of a given product are made at prices 
below the COP, we do not disregard any below-cost sales of that product 
because we determine that in such instances the below-cost sales were 
not made in ``substantial quantities.'' Where 20 percent or more of a 
respondent's sales of a given product are at prices less than the COP, 
we disregard those sales of that product, because we determine that in 
such instances the below-cost sales represent ``substantial 
quantities'' within an extended period of time in accordance with 
section 773(b)(1)(A) of the Act. In such cases, we also determine 
whether such sales are made at prices which would not permit recovery 
of all costs within a reasonable period of time, in accordance with 
section 773(b)(1)(B) of the Act. We found that Viraj did not make more 
than 20 percent of its sales of any product at prices less than the 
COP. Therefore, all of Viraj's home market sales have been included in 
the calculation of NV, in accordance with section 773(b)(1).

Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same level of trade (``LOT'') as the EP or CEP. Sales are made at 
different LOTs if they are made at different marketing stages (or their 
equivalent). See 19 CFR 351.412(c)(2). Substantial differences in 
selling activities are a necessary, but not sufficient, condition for 
determining that there is a difference in the stages of marketing. Id.; 
see also Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 
FR 61731, 61732 (November 19, 1997). In order to determine whether the 
comparison sales were at different stages in the marketing process than 
the U.S. sales, we reviewed the distribution system in each market 
(i.e., the ``chain of distribution''),\1\ including selling

[[Page 10380]]

functions,\2\ class of customer (``customer category''), and the level 
of selling expenses for each type of sale.
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    \1\ The marketing process in the United States and home market 
begins with the producer and extends to the sale to the final user 
or customer. The chain of distribution between the two may have many 
or few links, and the respondents' sales occur somewhere along this 
chain. In performing this evaluation, we considered Viraj's 
narrative response to properly determine where in the chain of 
distribution the sale occurs.
    \2\ Selling functions associated with a particular chain of 
distribution help us to evaluate the level(s) of trade in a 
particular market. For purposes of these preliminary results, we 
have organized the common selling functions into four major 
categories: sales process and marketing support, freight and 
delivery, inventory and warehousing, and quality assurance/warranty 
services.
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    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying 
levels of trade for EP and comparison market sales, (i.e., NV based on 
either home market or third country prices\3\) we consider the starting 
prices before any adjustments. For CEP sales, we consider only the 
selling expenses reflected in the price after the deduction of expenses 
and profit under section 772(d) of the Act. See Micron Technology, Inc. 
v. United States, 243 F. 3d 1301, 1314-1315 (Fed. Cir. 2001).
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    \3\ Where NV is based on CV, we determine the NV LOT based on 
the LOT of the sales from which we derive selling expenses, G&A and 
profit for CV, where possible.
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    When the Department is unable to match U.S. sales to sales of the 
foreign like product in the comparison market at the same LOT as the EP 
or CEP, the Department may compare the U.S. sale to sales at a 
different LOT in the comparison market. In comparing EP or CEP sales at 
a different LOT in the comparison market, where available data make it 
practicable, we make a LOT adjustment under section 773(a)(7)(A) of the 
Act. Finally, for CEP sales only, if a NV LOT is more remote from the 
factory than the CEP LOT and we are unable to make a level of trade 
adjustment, the Department shall grant a CEP offset, as provided in 
section 773(a))(7)(B) of the Act. See Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate 
from South Africa, 62 FR 61731 (November 19, 1997).
    Viraj reported that it sells to manufacturers and distributors in 
the home market and to distributors and resellers in the United States. 
Viraj reported two levels of trade (based on customer category) and a 
single channel of distribution in the home market. We examined the 
information reported by Viraj and found that home market sales to both 
customer categories were identical with respect to sales process, 
freight services, warehouse/inventory maintenance, and warranty 
service. Accordingly, we preliminarily find that Viraj had only one 
level of trade for its home market sales.
    Viraj reported a single, different, level of trade and a single 
channel of distribution for its EP and CEP sales. The EP/CEP level of 
trade differs from the home market only with respect to freight and 
delivery. Thus, it was unnecessary to make any level-of-trade 
adjustment. See section 773(a)(7)(A) of the Act.
6. Calculation of Normal Value Based on Home Market Prices
    We calculated NV based on ex-factory prices to unaffiliated 
customers. We made adjustments for differences in costs attributable to 
differences in the physical characteristics of the merchandise in 
accordance with section 773(a)(6)(C)(ii) of the Act. In addition, we 
made adjustments under section 773(a)(6)(C)(iii) of the Act for 
differences in circumstances of sale for imputed credit expenses. We 
also made adjustments, in accordance with 19 CRF 351.410(e), for 
indirect selling expenses incurred in the home market or United States 
where commissions were granted on sales in one market but not in the 
other (the commission offset).
    Preliminary Results of Review
    We preliminarily find the following weighted-average dumping 
margin:

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     Manufacturer/Exporter             POR       Weighted Average Margin
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Viraj Group, Ltd...............  2/1/00-1/31/01        0.10 (de minimis)
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    Any interested party may request a hearing within 30 days of 
publication of this notice. A hearing, if requested, will be held 37 
days after the publication of this notice, or the first business day 
thereafter. Interested parties may submit case briefs within 30 days of 
the date of publication of this notice. Rebuttal briefs, which must be 
limited to issues raised in the case briefs, may be filed not later 
than 35 days after the date of publication of this notice. The 
Department will issue the final results of this administrative review, 
which will include the results of its analysis of issues raised in any 
such comments, within 120 days of publication of these preliminary 
results.
    Upon completion of this administrative review, the Department shall 
determine, and the Customs Service shall assess, antidumping duties on 
all appropriate entries. The Department will issue appraisement 
instructions directly to the Customs Service.
    The following deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of stainless steel bar from India entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(1) of the Act: (1) The cash deposit rate 
for the reviewed company will be the rate established in the final 
results of this review; (2) if the exporter is not a firm covered in 
this review, but was covered in a previous review or the original LTFV 
investigation, the cash deposit rate will continue to be the company-
specific rate published for the most recent period; (3) if the exporter 
is not a firm covered in this review, a previous review, or the 
original LTFV investigation, but the manufacturer is, the cash deposit 
rate will be the rate established for the most recent period for the 
manufacturer of the merchandise; and (4) the cash deposit rate for all 
other manufacturers and/or exporters of this merchandise, shall be 
12.45 percent, the ``all others'' rate established in the LTFV 
investigation. (See 59 FR 66915, December 28, 1994).
    These requirements, when imposed, shall remain in effect until 
publication of the final results of the next administrative review.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties. In addition, this notice also 
serves as a reminder to parties subject to administrative protective 
orders (``APO'') of their responsibility concerning the disposition of 
proprietary information disclosed under APO in accordance with 19 CFR

[[Page 10381]]

351.305, that continues to govern business proprietary information in 
this segment of the proceeding. Timely written notification of the 
return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of an APO is a sanctionable violation.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    February 28, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-5472 Filed 3-6-02; 8:45 am]
BILLING CODE 3510-DS-S